Previous articles in the Yacht Guide have focused on the yacht broker’s role in the purchase of a boat. The following article is written from a marine surveyor’s point of view.
Why, you may be asking, do you need to use a marine surveyor? Picture the following scenario: You have found the boat of your dreams. The owner and yacht broker both tell you it is a wonderful boat and a very good buy at the price you have negotiated. You have personally inspected it and agree with their assessments. So why do you do you need to incur the extra expense and delays entailed in having it surveyed before taking possession of your new pride and joy?
Well, for one thing, a surveyor will provide an honest and unbiased opinion of the boat. He or she has no interest in whether you actually buy the boat or not, as a surveyor does not get a commission based on the price of the boat. A competent surveyor will look at the boat with completely different eyes than will you, the prospective owner. A professional surveyor who looks at many different boats during the course of a year sees many different problems, meaning he or she amasses a vast knowledge of the diverse issues and concerns that come along with buying a boat.
It is very important that you communicate to your surveyor your intended use for the vessel. For instance, if you plan to cruise the Caribbean in a US-registered boat, that boat should comply with USCG requirements. Some of these requirements are different from European Union requirements. For example, if the boat is to be British-documented or BVI-documented, there are different requirements for safety equipment and propane installation from the US Coast Guard. These differences are important when it comes to insuring the boat. If you intend to sail the boat offshore—say, back to Australia—then again, a different set of criteria will be required to make the journey.
Choosing a surveyor
Now that you understand why you need a surveyor, how do you go about selecting a good one? Unfortunately, not all surveyors are created equal. Anyone can call him or herself a surveyor and have business cards printed and advertise on the Internet or in the local paper. Websites can misleadingly tout their skills and competence. However, most good surveyors these days are members of a surveying association. In the US there is SAMS (Society of Accredited Marine Surveyors) and NAMS (National Association of Marine Surveyors), and in the UK there are companies such as MECAL Ltd. and IIMS (International Institute of Marine Surveying). All of these associations require competence of their members, who must abide by a code of ethical practice. In addition, they all require continuing education, which ensures that the surveyor’s knowledge is at least reasonably up to date.
If you are living locally, it is a good idea to ask others about surveyors in the area and gather recommendations. The local yacht club is also a good source of information, as are boat owners clubs. When considering prospective surveyors, you should also ask to see sample reports and review their contract. The contract should inform you of what you are actually going to get for your money during the survey. From the sample report you should be able to determine to some degree the competence of the surveyor. Avoid surveyors with “checklist” reports, which provide no real detail. Also, avoid surveyors with 30-page reports; a good surveyor will report in 10 pages or less.
I find it surprising how few surveyors are covered by indemnity insurance. A few years ago I surveyed a 40-foot sloop and condemned the chain plates as being unserviceable. The buyer didn’t purchase the boat. About nine months later I received an instruction from underwriters to attend a dismasting. When I arrived on the scene, I found it was the same vessel on which I had previously condemned the chain plates. The boat had been sold, the new owner had employed a surveyor and the surveyor had not noticed the cracks in the chain plates. In fact, his report stated that the chain plates were in good condition. The underwriter denied the claim because the boat was not in seaworthy condition when it went sailing. It was dismasted in only 10 knots of breeze. The whole rig failure caused the new owner approximately US$40,000 in damages and he was unable to use his boat for about three months. As insurance was not in place, the owner had no option but to attempt to sue the surveyor. This was a very bad situation that never should have happened in the first place. However, if the surveyor had had liability and errors and omissions insurance, the owner would have been covered by the surveyor’s insurance.
What surveys do you need?
There are several different types of surveys. If you’re buying a boat, you should be requesting a condition survey for purchase and evaluation for insurance. This means you can then use your purchase survey after you buy the boat for insurance purposes.
The other survey you may need is a condition and evaluation for insurance. Both surveys should be performed to the same degree of inspection. The main differences between the two, at my company anyway, is that with a purchase survey we will undertake a sea trial in order to prove that the systems work; we will not do this for an insurance survey.
In addition, during the purchase survey, we try to advise the buyer regarding items that may become issues in the future. For example, if you are a buying a 12-year old vessel fitted with stainless-steel tankage and the tank shows surface corrosion, this would not be an issue for insurance and would not be a recommendation for insurance. However, as a buyer you should be given the information by your surveyor; it is likely that the tanks will all need replacing in the near future even though they are not leaking at this moment in time. An experienced surveyor will recognize that this could be a major expense.
Many other different types of surveys exist. A tonnage survey, for instance, is required if you wish to register your vessel in Canada, Great Britain or the BVI. A boat that is already US-documented will have a US tonnage certificate, but this cannot be used by the European Union states or Canada because individual countries have their own individual means of measuring tonnage.
A tonnage survey is very different from a condition survey. The purpose of the tonnage survey is to measure the internal volume of the vessel. It dates back to the 1870s when the British government was trying to decide how to tax ships bringing cargo into ports. It was decided that they would measure the internal volume of the vessels determine how much wine could be transported on them. So every time you enter a country and go through customs clearance, you can thank the British and think of the amount of wine you could carry.
For vessels requiring Canadian documentation, if the vessel is less than 15 metres long, you can measure it yourself. Any vessel over 15 metres or a catamaran needs to be measured by a certified measurer. For British tonnage you basically need to be measured by a certified measurer. Some surveyors are able to carry out all different types of surveys and you may find that they will give you a discount if you do complete the purchase and then require a tonnage measurement.
Many of the boats in the BVI are sold through chartered fleets. Some of the charter fleets have a phase-out programme. In other words, they have an agreement with the owner that the vessel will be returned to him or her in a certain level of condition. What normally happens in these instances is that the survey is undertaken and there is a negotiation between the broker, buyer, seller and charter company—an agreement regarding what work will be carried out before the sale is completed. With companies like The Moorings or Sunsail this typically takes two, three or even four weeks to complete.
Next issue:
Part 2: What does the survey entail?
